The open banking hacks you need to know to boost your finances

Since coming into effect in 2018, open banking regulations have seen a wave of apps and tools that allow users to manage their finances better without the need to switch bank accounts.

The rules require UK banks to release customers’ financial data – with their consent – in a secure way to authorised online businesses. As a result, users can link savings, accounting or other financial apps with their banking accounts. Viewing different bank accounts and credit cards in a single app is now possible, too. Power has been given back to consumers.

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Opening up data to third-party apps also allows users to shop for the best financial products from mortgage brokerage to life insurance. Besides that, there are various tools for freelancers and small business owners that take the hassle of administrative tasks such as invoicing or collating receipts needed to file taxes.

Here are the apps that could save you time and money. Some of these tools have been around for a while, but moving and managing money between them and your bank account is now much easier.

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Get rewarded for shopping

There are tons of couponing apps and most banks offer their own list of shopping discounts. Airtime Rewards lets you pay off your mobile bill through cashback received from Waitrose, Topshop or Argos; or connect your Monzo or Starling card with the Tail app to receive the earned cashback directly in your banking app. Flux is a similar loyalty app for Monzo, Starling and Barclays users that sends a digital receipt when paying with your debit card at Costa Coffee, EAT, Itsu, schuh and other retailers – together with a reward.

Time is money, too. The MishiPay app lets shoppers scan barcodes, pay and leave without having to queue in retailers like Decathlon and Mango. In-app payment automatically disables the items’ security tags. Sainsbury’s recently launched its SmartShop self-checkout app and Co-op has offered this type of pay-in-isle technology since 2018.

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Payday, any day

While waiting to get paid, people often resort to costly credits – including credit cards, overdrafts and payday loans – to cover emergency repairs in the house, household bills or a long-haul flight. In fact, 78 per cent of UK workers are said to rely on credit. If offered as part of a benefits package, employees can use the Hastee Pay app to advance up to 50 per cent of the money they have earned in the current payroll cycle. Registration with the service is free on both ends, but employees will have to pay a one-off 4.5 per cent fee for withdrawals, which is substantially lower than most interest rates for credits.

Get on the credit ladder

Paying off a credit card, loan or utility bills in full and on time has an influence on your credit score, which lenders use to decide whether they should approve another loan, a mobile phone contract or your first application for a mortgage – and at what interest rate. There are various credit reference agencies that let you check your credit score for free, including Experian, Equifax and TransUnion.

People with a ‘thin file’, that is little or no credit history at all, might be at a disadvantage as lenders might be reluctant to approve an application. Credit Ladder is a platform that is linked to the bank account used to pay your rent and lets you build up a history on the Experian credit file – and the tool can now be activated straight in the Starling banking app.

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Avoid high fees when transferring money abroad

TransferWise has been around for a while now and is one of the cheapest services to send money abroad. For instance, using PayPal for a £100-payment outside Europe or North America will cost £3.99; TransferWise charges a quarter of the fee. The UK-based company recently launched a debit card in the US that works with 40 currencies. It costs $7.25 (£5.80) to send $1,000 (£805) to a UK account. The Bank of America would charge $63.88 (£51.50) and PayPal $34.64 (£27.90) for the same amount, according to TransferWise.

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For UK residents regularly converting euros into pounds and back again, Starling bank now offers a free Euro exchange account. The digital bank will start charging a 0.4 per cent conversion fee from September.

Banking and accounting, in a single app

Designed for freelancers, sole traders and small business owners, the Coconut app takes away the admin burden. As you use the free current account, it will estimate how much tax to save and will provide advice on what expenses can be claimed in a tax return. Business expenses are organised in categories and instant payment notifications remind you to grab a receipt in the shop.

You can issue three invoices for free every month, or it is possible to upgrade to a Grow account for £5 per month for unlimited invoicing and zero charges when paying with the debit card abroad. Starling and Monzo offer a free business account, too – with the option to register and integrate third-party accounting software from FreeAgent or Xero.

Give to charity when shopping

Challenger bank Revolut has launched a donations function that allows users to round up card payments to the nearest pound and donate the spare amount to Save the Children, WWF or ILGA-Europe. Revolut doesn’t keep anything and pays the full amount to your chosen charity. There are a number of standalone apps that have partnered with major banks to offer the same functionality, including Edinburgh-based Sustainably that donates to the British Heart Foundation, Alzheimer Scotland and other local charities. The charities will have to pay a small monthly fee though.

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A cryptocurrency wallet

You want to get started with cryptocurrencies but are unsure where to invest in and how to keep track of market fluctuations. Coinbase and Gemini have long been the standard for newcomers who want to get familiar with Bitcoin and other major cryptocurrencies. In June, Coinbase even launched a debit card for payments in European stores. But the transaction and conversion fees are non-negligible. For users who want to explore smaller coins, Blockfolio tracks more than 8,000 currencies.